Except for snippets apparently leaked to the Wall Street Journal, little information was forthcoming from the directors of Harrah’s Entertainment Inc. (HET) relative to their evaluation of bids regarding the acquisition of the company.
On Monday, the word being repeated by several news organizations that often quoted the Wall Street Journal as their source was that the initial bidder, private equity firms Apollo Management and Texas Pacific Group (TPG), had increased their bid to $16.7 billion, or $90 a share.
It later was reported that the bid had been accepted and the announcement confirming the action could be expected as early as Tuesday.
The partners had initially bid $15.1 billion or $81 a share but reportedly had increased that to $83.50 a share.
However, a bidding war developed when the much-smaller gaming company Penn National Gaming Inc. (PENN) jumped into the fray with an $87 per share bid that would consist of $71 in cash and $16 in stock.
Throughout the weekend, sources were quoted as saying the special committee comprising all 11 directors, except Chairman and CEO Gary Loveman continued a meeting, begun on Wednesday, in an attempt to resolve the matter.
It was felt that if the private equity firms were successful, Loveman would continue to operate Harrah’s while Penn National probably would install its own management team.
A source also reported that the directors’ deliberations were being headed by premiere deal maker Steve Bollenbach, president of Hilton Hotels Corp. (HLT). Bollenbach and W. Barron Hilton, Harrah’s largest shareholder with 4.5 million shares, are members of the Harrah’s board. Bollenbach has engineered a number of major acquisitions and sales and was the lead player in the sale of Hilton Hotels’ Caesars gaming division to Harrah’s.
One option that the directors also considered was to recapitalize the company by borrowing money to give shareholders a large dividend or to repurchase shares.
In addition to operating 39 casinos in the U.S., including the Caesars properties it acquired last year, the company runs casinos in Canada and Uruguay and recently agreed to acquire the British-based London Clubs International Plc.
Trading in Harrah’s shares was active all day Monday with more than nearly 13.7 million shares changing hands. By day’s end, the shares were trading at $82.18 each, up $2.68 for the day.
MGM MIRAGE Inc. (MGM) will send its brand name across the country with the development of the MGM Grand at Foxwoods, a $700 million destination hotel/casino resort the company will build next to the Foxwoods Hotel/Casino Resort in Connecticut.
The announcement was made Monday by both organizations.
The agreement, initially to involve the new project, provides for a multi-faceted strategic alliance for major new developments of additional gaming and non-gaming properties, both in and out of Connecticut.
The new Foxwoods resort will contain meeting and convention space, fine dining, a night club, spa and retail amenities.
According to the announcement, "the parties contemplate that additional MGM MIRAGE brands may be associated with such projects," and that the entity overseeing the projects will be called Unity Gaming LLC.
Five applicants have made their pitch for two stand-alone slots licenses in Pennsylvania and the decision makers have said they plan to select the winning bidders on Wednesday.
Getting a last-minute boost was the Aztar Corp. (AZR) pitch for a license to be located in Allentown, the state’s third largest city whose economy is stagnant.
"We need your help, pleaded Allentown Mayor Ed Pawlowski. He said a slots license in a city the size of Allentown could spread economic cheer to the surrounding Lehigh Valley. But if the Aztar bid fails, Allentown will become a "black hole sucking everything in its path."
Aztar is in the process of being acquired by Columbia Sussex but owner William Young has said he is willing to go forward with the Aztar plan for a $350 million Lehigh Valley Tropicana gaming facility.
Also seeking the license is a private group that wants to build a casino on land bordering the historic Gettysburg National Military Park, a move that has caused considerable controversy.
A bid by real estate developer Bruce Eichner and the D.E. Shaw Group seeking to takeover Riviera Holdings Corporation (RIV) for $21 a share has been rejected.
William Westerman, Riviera’s chairman and CEO, announced that the 30-day exclusive negotiating agreement between the company and the bidders had expired.
"We remain committed to the growth and ongoing success of our company and will continue to focus on maximizing our company’s performance," Westerman said.
Previously, the company rejected offers of $17 a share from Riv Acquisition Holdings Inc. and $20 from International Gaming & Entertainment LLC.
Indiana-based Centaur Inc. says it will pay $8.2 million to take over from Churchill Downs Inc. (CHDN) the remaining 62% ownership interest the company has in Hoosier Park racetrack.
The deal will make Centaur the sole owner of the Anderson track.
In making the announcement, Centaur CEO Jeffrey Smith noted that some 90% of Centaur’s shareholders are Indiana residents, a situation he said, "gives us a little more opportunity to be more Hoosier-oriented."
The company currently owns Fortune Valley Hotel & Casino in Central City, Colo., and operates off-track betting centers in Indianapolis, Fort Wayne and Merrilville, Ind.
New York state is in the process of determining who will own the franchise for the Aqueduct, Belmont and Saratoga racetracks when the existing franchise held by the New York Racing Association expires in December, 2007.
But, NYRA says the state lacks the authority to award the operating franchise to another entity because NYRA owns the tracks. And, the current operator has now taken legal action to stop the process.
Lawmakers are scheduled to decide early next year who should run the tracks. NYRA’s lawsuit contends the state’s plan is unconstitutional and unenforceable because NYRA owns the tracks. The state disagrees.
"The lawsuit," said a representative of New York Gov. George Pataki, "is just the latest sad chapter for an organization that is mired in scandal and out of options and that continues to blame others for the problems they have created."